The Texas Entertainment Association (TEA) has announced that adult cabarets (or as most people call them, strip clubs) received notification from the Texas Comptroller that the $5 stripper tax is due despite a court ruling that the tax is unconstitutional.
A Texas judge had ordered that the, “Defendants are permanently enjoined from assessing or collecting the tax imposed by sections 47.051-.056.” However, the Texas Attorney General’s Office filed an appeal on April 7. Letters were subsequently issued that while the appeal was pending, the tax would still be collected.
Hmm. Apparently the State of Texas is desperate for cash. I can’t imagine the lost revenue that would be so great during the appeal that would cause the state to collect it nonetheless. And if the appeal is defeated, what then? Will the state return the taxes? To whom? The tax is to be collected by the clubs from patrons. It would be practically impossible – and unduly burdensome – to return those taxes to patrons.
It’s simply bad policy.
On the other hand, I don’t buy the argument/drama from the clubs that: Cabaret owners may be forced to shut down. In these economically tough times, hard-working taxpayers employed by these legal businesses deserve better than being forced out of gainful employment by elected officials seeking to impose a patently unconstitutional law on an unpopular industry for the purposes of political gain.
I agree that it’s a silly tax. But it’s hardly going to force businesses to close. If you want to go to a strip club, you’re going to a strip club, $5 tax or no. Like most sin taxes, it is a revenue raiser, not a behavioral control.
Lawyers on both sides are getting warmed up. I’ll keep you posted.
(Hat tip: Craig McDaniel)
